Home > Topics > Dealmaking and Marketing Technology to Product-Development Partners > Business Partnerships in Agriculture and Biotechnology that Advance Early-State Technology > Editor's Summary, Implications and Best Practices

This chapter discusses the market and policy factors that influence and constrain agricultural companies, how to market technologies to these companies, and what these companies look for in terms of license agreements.

Early-stage agricultural technologies, whether transgenic or conventional, can be risky because they may not have commercial applications or they may fail to receive regulatory approvals in the necessary markets. Gaining regulatory approval can be a slow and costly process. Furthermore, there is a low marginal revenue made on agricultural inputs and there are only a handful of crop species with sufficient production to generate the necessary or desired magnitude of returns. For these reasons, most transgenic technology is developed by a few large corporations, since they are the only ones that can deal with the high risks involved.

A university can market its technology to a large company either through the company’s licensing staff or researchers. In either case, the university must effectively communicate the benefit that the technology might bring to the company and to find someone inside the company who is willing to take a gamble on it. It is important to establish relationships with companies by networking, to decide which technologies would be most attractive to which companies, and to post information about the technologies on a website. Researchers often have a better idea of whether or not a technology meets the needs of a company than does the licensing staff, and they are also able to understand communications of a more technical nature.

For companies, the value of a new technological opportunity is determined by the risk involved (that is, informed balancing of risks and benefits), the additional investments required to develop the technology, and the type of technology in question. All else being equal, the more developed or characterized a technology is, the less risky and less investment required, and therefore the more valuable it is to both licensor and licensee move towards the market. Technologies that will provide the licensee with a unique and competitive product are generally considered more valuable than enabling technologies, which may accelerate R&D or provide freedom to operate, but cannot be used to create products by themselves.

Both licensor and licensee naturally want favorable license-agreement terms for themselves. In general, licensees want to have a grant that is as broad and exclusive as possible so that they can maximize their profits. At the same time, they generally want payment terms and diligence provisions that are as flexible as possible. No matter what, the relationship between licensor and licensee should be robust and their dealings transparent.

Currently, there are only a handful of large agricultural firms to which universities and institutes can license their technologies. However, if a relationship can be forged, the potential benefits are large.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• The high costs and delays caused by the regulatory burden in agricultural markets have driven transgenic technology into the hands of just a few large players that are able to handle the resulting cost/risk threshold. If entrepreneurship in agricultural genetics is to take off in a given country, this threshold needs to be lowered to a level that smaller companies and public sector institutions, can become active participants in biotechnology innovation.

For Senior Management (university president, R&D manager, etc)

• Currently, there are only a handful of large agricultural firms to which universities and institutes can license their technologies.
• With government support, public-sector institutions could create spin-out or start-up companies whose purpose it is to develop public-sector research into products that benefit the public.

For Scientists

• The licensing company’s R&D staff will be better able to understand the technical significance of your invention and to judge whether it meets the needs of their company than the licensing staff.
• Record keeping, precise and thorough according to an institutional policy, is critical to best practices in IP management. This is your responsibility, and your contribution, to the overall flow of inventions into the innovation pipeline, that is, from R&D to commercialization.

For Technology Transfer Officers

• Technology can be marketed to a company’s licensing staff or to its researchers.
• You need to effectively communicate what benefit your technology might offer a company and to identify someone inside the company who will be willing to take a gamble on that technology.
• It is important to establish relationships with the private sector by networking, decide which technologies would be most attractive to which companies, and post information about the technologies on a website.
• Licensees want to have a grant that is as broad and exclusive as possible, with payment terms and diligence provisions that are as flexible as possible. No matter what, the relationship between licensor and licensee should be robust and their dealings transparent.